The PUC adopted interconnection standards for distributed generation including CHP. The standards apply to investor-owned utilities in the state. The rules are based on IEEE 1547 and provide for four levels of interconnection for systems <10 MW in capacity:

Tier 1: applies to inverter-based systems up to10 kW that use lab-tested equipment. General liability insurance is necessary, however Tier 1 systems only need "proof of adequate homeowners, general liability or commercial liability insurance sufficient to insure against all reasonably foreseeable direct liabilities given the size of the small generator facility."

Tier 2: applies to systems up to 2 MW that use lab-tested equipment.

Tier 3: applies to systems up to 2 MW that do not export electricity.

Tier 4: applies to systems up to 10 MW that do not meet the requirements of the lower tiers.

General liability insurance is required, with levels that vary by tier. For all systems other than residential generators up to 10 kW in capacity, the customer must include the utility as an "additional insured."

Specific feasibility screens have been established for each tier, along with reasonable timeframes for utility responses to applications and process steps. System owners are generally responsible for all interconnection expenses, including interconnection equipment, utility system upgrades and adverse system impacts. Utilities are authorized to require the use of an external disconnect switch. The PUC staff may assist with dispute resolution when appropriate.

CHP Eligibility Requirements

Both fossil-fueled and renewably-fueled CHP systems are eligible for standardized interconnection.